PETALING JAYA: The Federal Government allocations to state governments have been raised to RM9.8 bil this year, as compared to RM9.3 bil in 2024.
The increase was approved by the National Financial Council at its meeting chaired by the Prime Minister Datuk Seri Anwar Ibrahim on Thursday (March 6), said the Prime Minister’s senior press secretary Tunku Nashrul Abaidah during his daily briefing Thursday.
“The Prime Minister today chaired the 2025 National Financial Council meeting, attended by Sarawak Premier Tan Sri Abang Johari Openg, chief ministers, and state ministers.
“One of the key approvals granted was a 25% increase in the capitation grant for state governments, amounting to an additional RM109mil, bringing the total to RM548mil.
"This marks the first revision of the capitation grant since 2002.
“Overall, Federal Government allocations to state governments have been increased to RM9.8bil for 2025, compared to RM9.3bil last year.
“The Prime Minister emphasised that this increased allocation is crucial to helping state governments improve services for the people,” said Tunku Nashrul, stating that such an increase affirms the Madani government’s strong relationship with all state governments.
On another matter, Tunku Nashrul revisited the settlement of the defamation lawsuit filed by Anwar against Kuala Terengganu MP Datuk Ahmad Amzad Hashim on Wednesday.
“The Prime Minister had decided not to pursue this dispute further. This decision is made in the spirit of Ramadan, emphasising the importance of avoiding baseless accusations.
“False accusations not only harm the accused but also reflect poorly on the accuser.
“Forgiveness does not diminish a person’s dignity; rather, it elevates their status in the eyes of God. The practice of fasting should serve as a reminder for self-reflection, encouraging a culture of meaningful discourse while rejecting slander and defamation,” said Tunku Nashrul.
The defamation case stemmed from Amzad’s allegations that Anwar had received RM15mil from the Selangor government while serving as its economic adviser.
The High Court in Kuala Terengganu recorded the settlement on March 6 with no costs before Judge Hassan Abdul Ghani.
Tunku Nashrul also conveyed Anwar’s reminder not to exploit racial sentiments and sow hatred.
“Anwar acknowledged that some parties with vested interests are attempting to create the perception of a 'double standard' in law enforcement.
"However, he dismissed such accusations as baseless, reaffirming that anyone who insults any religion in Malaysia will be investigated and prosecuted,” said Tunku Nashrul.
“The claim that the government remains silent when Islam is insulted is false and unfounded. The listed cases demonstrate that every incident is investigated, prosecuted, and penalised under existing laws. Any reported case follows due legal processes,” said Tunku Nashrul.
On the issue of the Northern Corridor Implementation Authority (NCIA), Tunku Nashrul said that NCIA will play a key role in driving the National Semiconductor Strategy (NSS) to foster the growth of a high-tech semiconductor industry in the Northern Corridor Economic Region (NCER) and Malaysia.
“The NCIA must leverage this opportunity to strengthen the development of the semiconductor industry, particularly in Advanced Packaging (AP), High-Value Manufacturing (HVM), and building a high-value technology and supply chain ecosystem to attract impactful investments.
“On March 5, the government launched a collaboration with Arm Holdings plc, the world’s largest chip architecture designer. This partnership will enhance Malaysia’s semiconductor and artificial intelligence (AI) industries.
“Expanding high-value industries requires a skilled and high-quality workforce. Effective talent development is crucial to optimising the benefits of high-value and high-tech investments.
"NCIA must establish a comprehensive Talent Development Ecosystem to complement investments in the Northern Region, which includes skills development programs at the tertiary level, strategic intervention programs to enhance graduates' employability and workforce upskilling programs within the industry,” said Tunku Nashrul.
